The rapid development of lithium battery industry "to the middle of the line" : second-tier enterpri

Coincidentally, on November 18, the IPO of Honeycomb Energy Innovation Board was accepted by the Shanghai Stock Exchange; On November 14, Xinwanda issued global Depositary Receipts (GDRS) and listed on the Swiss Stock Exchange, becoming the second Chinese power battery company listed on the Swiss Stock Exchange; On November 13, MIL Cloud announced a major asset restructuring plan, Tianjin Lishen's two lithium battery companies will be injected.

It is widely believed in the industry that the country will transition from fully supporting the development of the new energy vehicle industry to "supporting the best and the strong". According to relevant policies, vehicles registered after December 31, 2022 will no longer be given subsidies, and the change in policy orientation will intensify the competition in related industries, accelerate the optimization of battery costs, and accelerate the low-end production capacity. At present, the lithium battery industry is still in the stage of rapid development. Second - and third-line battery factories should seize the "window period" and accelerate the listing for further development.

Second line battery factory speed up the catch up

According to market Research firm SNE Research, from January to September 2022, the global installed battery capacity of electric vehicles reached 341.3GWh, a year-on-year increase of 75.2%, continuing the growth trend since the third quarter of 2020. Among the top 10 companies in the world in terms of power battery installation volume, there are 6 Chinese companies, accounting for about 57.8% of the market share.

Among them, the global market share of the two head battery manufacturers Ningde Times and BYD is 35.1% and 12.8%, respectively; the market share of China Innovation Singapore Airlines is 4%, the market share of Guoxun High-tech is 2.9%, the market share of Xinwang is 1.7%, and the market share of Honeycomb Energy is 1.3%.

Industry insiders believe that because the market share of the head battery enterprises is too large, although other battery factories are also accelerating to catch up, but there is still a big gap.

From the end of 2021 to now, the price of core raw materials such as lithium carbonate has accelerated. In the context of the imbalance between supply and demand of the industrial chain, the game of the industrial chain has intensified. The doubts about "one dominant company" in Ningde era have disturbed the market from time to time.

On Oct 6, China Creative Singapore Airlines listed in H shares, raising more than 10.1 billion yuan, becoming the third largest IPO in Hong Kong this year. Among its cornerstone investors is Xiaopeng Motor, and its biggest customer is GAC Aean. Hive Energy, whose IPO was accepted on Nov. 18, is itself funded by Great Wall Motor and also has Xiaopeng on its shareholder list.

Xinwang Da, Fu Neng technology also got the assist of the vehicle factory. In February this year, Xinwangda released the announcement of capital increase of Xinwangda Electric Vehicle Battery Co., LTD. (hereinafter referred to as "Xinwangda EVB"), and Ideal Automobile and NexteV affiliated companies were listed in the investment list.

However, from the performance point of view, although some second-line battery factory scale achieved rapid growth, but some second-line battery factory power battery business is still on the edge of loss.

According to the data, from 2018 to 2021, the domestic load of battery increased from 0.7GWh to 9.1GWh. From 2019 to 2021, the operating revenue of CSIA increased rapidly from 1.734 billion yuan to 6.817 billion yuan, and the net profit of the company was -118 million yuan, 5.157 million yuan and 140 million yuan respectively. It is worth mentioning that in the recent three years, CSIA received government subsidies and subsidies of 309 million yuan, 135 million yuan and 365 million yuan respectively. Csia's gross margin was 4.8%, 13.6% and 5.5%, respectively, compared with Ningde Times' lowest gross margin of 26.28% in the last five years.

The operating revenue of Honeycomb Energy from 2019 to the first half of 2022 was 929 million yuan, 1.736 billion yuan, 4.474 billion yuan and 3.738 billion yuan respectively. Net profit in the same period was -326 million yuan, -701 million yuan, -1,154 million yuan and -897 million yuan, respectively. Xinwangda EVB has yet to make a profit, with a loss of 109 million yuan in the first half of the year.

As for the reasons for the loss, the battery factory explained that it was mainly caused by the high intensity of the company's research and development investment, the climbing capacity, the increase of raw material purchase price and other factors, as well as the business is in the initial stage and the need for continuous investment.

In this context, "the left hand is busy expanding production, the right hand is busy listing" accurately describes the current status of second-line power battery manufacturers.

Seeking Differentiated development

When it comes to the reasons why second-tier power battery manufacturers are piling up for listing, many industry insiders say that the current power battery industry is still in a period of growth, and promoting listing can accelerate capacity expansion and enhance competitiveness.

Reporters found that most of the IPO funds raised by power battery manufacturers were used for production expansion, but also some were used for the research and development of new power battery technology and energy storage technology.

At present, power batteries are packaged in soft packs, cylindrical, square and other ways. First-line power battery manufacturers such as Ningde Times and BYD mainly use square battery products, which mainly affects the supply situation of the current domestic power battery market.

Qi Haishen, president of Beijing Sunshine New Energy, believes that the lithium battery industry chain itself has competition problems of different technological routes, and who can stand out from the market has yet to be verified.

"In fact, as long as it can solve the customer's pain points, such as charging time, safety, range, cost and other issues, as well as the stability of the supply, the customer has no special requirements on the packaging form." An industry insider told reporters.

"The industry concentration of China's power battery manufacturers is not very high," said Zhang Xiang, an auto industry analyst. "The coexistence of multiple technology routes is good for second-tier companies, and there are many opportunities to develop in this market."

However, it is not easy to differentiate the development of the road, some widely regarded second-line power battery manufacturers still have a profit problem, such as Honeycomb Energy has been three and a half years of losses; Funeng Technology has not yet made a profit, but Funeng Technology mainly focuses on ternary soft pack power batteries. After landing on the Science and Technology Innovation Board, the company's production capacity has been rapidly expanded, and its operating revenue has also increased substantially.

The above insiders said that the penetration rate of soft package will rise in the future. Soft pack battery has a unique structural advantage, is the most easy to be converted into solid state battery packaging form in the future.

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